Stock Market Analysis & News: October 7th, 2024

Global Markets

Canadian Markets

Canada’s main stock index, the TSX experienced a slight decline on Monday as investors reassessed expectations for a potential interest rate cut by the Federal Reserve in November, and its impact on Canadian financial markets and the Bank of Canada’s future rate policy settings . This shift in sentiment comes as market participants await key economic data from both Canada and the U.S. later in the week, which could influence monetary policy decisions.

American Markets

In American financial markets, the benchmark 10-year Treasury yield climbed to 4% for the first time in two months, prompting a sell-off in U.S. stocks, creating a risk off event for traders and investors. Higher bond yields generally signal rising borrowing costs and can dampen investor enthusiasm for equities, particularly those in rate-sensitive sectors like real estate and utilities.

European Markets

European indexes were mixed, as data came out to show that Europeans are anxious over economic outlook, and as a catalyst they are hoarding savings. The eurozone has agreed to to tighten restrictions on Chinese EV’s, and impose hefty tariffs across the board to protect the European auto industry.

UK markets rose a quarter of a percent, as TGI Fridays UK secured a financial rescue package, which sees 1,000 job cuts,  and 35 store closures.  A HSBC survey shows that UK firms are bullish on corporate outlook.

Asian Markets

Hong Kong stocks reached their highest level in over two-and-a-half years. This rally was driven by strong performances in technology and tourism stocks, reflecting renewed investor interest and optimism in these sectors.

Japan’s Nikkei index also ended higher, buoyed by a weaker yen.  The Bank of Japan reported that the Japanese economy is recovering, though the pace of improvement varies by region. In its quarterly regional economic report, the central bank upgraded its assessment for two of the nine regions while keeping its outlook unchanged for the others.

Corporate Stock News

• Adani Group: In talks to acquire Heidelberg Materials’ Indian cement operations for about $1.2 billion.
• Apollo Global Management & Barnes Group: Apollo Funds to acquire Barnes for $3.6 billion, offering shareholders $47.50 per share in cash.
• Arcadium Lithium: Rio Tinto is in talks to buy Arcadium Lithium amid declining lithium prices, with a potential valuation of $4 billion to $6 billion.
• AstraZeneca: Will pay up to $1.92 billion to CSPC Pharmaceutical Group for an exclusive license to boost its cardiovascular pipeline.
• Canadian Natural Resources: Acquiring Chevron’s Athabasca Oil Sands and Duvernay Shale assets for $6.5 billion, as part of Chevron’s divestiture plan.
• Chevron: Selling assets in Athabasca Oil Sands and Duvernay Shale to Canadian Natural Resources, part of a broader divestiture strategy.
• Equinor: Acquired a 9.8% stake in Danish renewable energy group Orsted for approximately $2.5 billion.
• Italgas: Italy’s largest gas distributor to buy rival 2i Rete Gas for €5.3 billion.
• Pfizer: Activist investor Starboard Value has taken a $1 billion stake in Pfizer, urging changes for improved performance.
• Shell: Noted a nearly 30% drop in refining profit margins and adjusted its LNG production guidance upwards for the quarter.
• Stellantis: Plans to produce a new version of the Jeep Compass mid-sized SUV at its Melfi plant starting next year.
• T-Mobile US: The FCC approved SpaceX and T-Mobile to use Starlink satellites for direct-to-cell capabilities in North Carolina post-Hurricane Helene.
• TotalEnergies: Considering entering the copper trading market to align with global energy transition trends.
• Vista Outdoor: Agreed to sell its sporting goods and ammunition businesses for a total of $3.35 billion, countering a hostile takeover attempt.
• Virgin Galactic: Partnered with Italy’s Spacewear to develop astronaut training apparel and co-branded clothing for 2025.
• Wynn Resorts: Awarded the first commercial gaming operator’s license in the UAE, developing a luxury resort in Ras Al Khaim.